BANDAR SERI BEGAWAN – Hengyi Industries will sink US$9 billion into the Phase II expansion of the Pulau Muara Besar petrochemical complex, the minister at the Prime Minister’s Office (PMO) said Tuesday.

Speaking at the Legislative Council, Pehin Dato Hj Halbi Hj Mohd Yussof said the expansion was still in the planning stage, but dredging works and land reclamation is already underway on Pulau Muara Besar and slated for completion by the end of the year.

In Phase I, Hengyi Industries invested US$3.45 billion for the construction of an oil refinery and aromatics plant, which began operations in November 2019.

Phase II will be significantly larger, increasing capacity of the oil refinery from 160,000 barrels/day to 280,000 barrels/day. The Chinese firm will also build a paraxylene unit, an ethylene plant and purified terephthalic acid (PTA) facility.

Paraxylene and PTA are key materials for making polyester fibre used in textiles and packaging.

“Phase I produced seven [petrochemical] products, while Phase II is expected to produce at least 10 new petrochemical and chemical products, while also generating employment opportunities for locals,” Pehin Hj Halbi said.

Phase II is expected to be operational by 2027 or 2028.

The expansion of the downstream oil and gas sector is expected to drive Brunei’s economic growth and post-COVID recovery, with petrochemical products now accounting for the bulk of the country’s exports.

Boosting oil output

The Department of Energy, which falls under the purview of PMO, has drawn up a strategic plan to maintain oil and gas output at the current level of 300,000 boe/day, eventually upping production to reach 350,000 boe/day in the long-term.

“This target requires development of deep sea resources and an increase in exploration activities,” the minister said.

To realise this goal, the upstream oil and gas sector is expected to spend nearly $20 billion to finance development and operational programmes in the next five years — an increase of 15% over the previous five years.

FILE PHOTO: Second Defence Minister and Minister at PMO Pehin Hj Halbi during a Legislative Council meeting on March 17, 2021. Photo: Faiq Airudin/The Scoop

Pehin Hj Halbi said Brunei will continue to cooperate with OPEC+ countries to stabilise the oil market, a move that will “benefit producers and consumers in the long-run”.

In 2022, Brunei’s net income from the upstream oil and gas sector was the highest it has been since 2014, owing to high energy prices in the wake of the Russia-Ukraine conflict.

The minister added that PMO remains committed to energy transition and will expand solar energy output by 200 megawatts in the next two years.

“In the long term, we will also explore the production of other renewable energy sources such as hydrogen, as well as carbon capture technology and storage,” he said.

PMO budget up 39%

Pehin Hj Halbi also announced the proposed budget allocation for PMO, a total of $537.19 million for the 2023/2024 financial year.

The allocation is up 39% from the previous year.

The minister did not share a breakdown of the ministry’s proposed spending, and said the budgets of five departments — the Narcotics Control Bureau, Anti-Corruption Bureau, Internal Security Department, Royal Brunei Police Force and Brunei Research Department – would not be disclosed due to the “sensitive” nature of their operations.